Backed by CI Capital, the Chicago-based company already has made two acquisitions this year.
Redwood Logistics, which announced its acquisition of Strive Logistics
this week, hopes to double revenues from about $500 million in 2018 to
$1 billion as soon as 2020.
Mark Yeager, the chief executive
officer of the Chicago-based company, said that Redwood has gone from an
organization with 320 employees in 2017, to one with 750 workers today,
not including truck drivers it employs. The company says it is now both a top-15 truck broker and multimodal logistics provider managing over $1 billion in freight.
Redwood has grown both
organically and through acquisition. In addition to the purchase of Strive, on Jan. 29 Redwood announced it had acquired Atlanta-based LTX Solutions, a provider of less-than-truckload freight management and transportation freight management.
“We think we are definitely one of the faster-growing truck brokerage companies in the United States,” said Yeager (pictured above).
Yeager noted that the truck brokerage
business is very fragmented, with thousands of smaller brokers and a few
very large players such as C.H. Robinson and Echo.
“We think we can navigate to a position that enables us to execute very effectively, but also provide customized solutions to our customers,” he said. “If we get to a critical mass, we will be in a differentiated position in a competitive marketplace.”
A broker brings more value when there is an imbalance between supply
and demand for trucking and less in a period of equilibrium, Yeager
explained. In a tight market, a broker can bring value to a shippers
having difficulty finding capacity, and vice a versa, when capacity is
plentiful, a broker can be most valuable to carriers.
He said “2018 was a
sellers market and that enabled us to perform quite well as an
organization by being an effective purchaser when shippers were having a
great deal of difficulty securing capacity.
“We want to continue to grow. Growth brings a depth of customer base, carrier base and talent and ability to invest in more technology.”
About 60 percent of
Redwood’s revenue comes from truck brokerage — matching truckers and
shippers who need over-the-road truckload transportation. Another 20
percent is LTL management and the remaining revenue
coming from transportation management and a dedicated trucking operation
that the company has based out of El Paso, Texas.
Redwood and Strive, also based in Chicago, provide similar services,
said Yeager, “but there isn’t a lot of customer overlap. They do a lot
of business in the consumer products world and have a number of very
large customers. We tend to serve more the middle market. So it’s really
a nice combination.
“It adds to density and size of carrier base
so the pool of capacity we can access got much larger,” he said. It also
brings in “management and front line talent — the folks who know how to
buy and price appropriately.”
Strive also has a large office in
Austin, Texas, and Yeager said, “Part of our strategy has been to expand
geographically, so this really helps us enter a new and highly
significant market.”
Terms of the Strive and Redwood transactions were not disclosed.
In January 2018, the New York-based private equity firm CI Capital Partners acquired a majority interest in Redwood and combined Redwood with Simplified Logistics, an Ohio-based LTL provider that CI Capital had owned since February 2017.
“Strive has made significant investments in both its people and its
proprietary technology, and we are very excited to welcome the Strive
team and its technology to the Redwood family,” said Yeager. “We see
this as a major step in establishing Redwood as an industry leader and a
transformative force in the marketplace.”
He said Redwood will adopt Strive’s proprietary transportation management system, called LoadRunner, which he said has business intelligence and process automation features that were lacking in Redwood’s current system
Yeager was formerly vice chairman and president of Hub Group before leaving that company in 2015.
Redwood President Todd Berger said the company is “focused on bringing
next-generation, tech-driven solutions so that our customers can
continue to realize cost savings and efficiencies and achieve their
shipping goals. Strive’s high-caliber team, blue-chip customer base,
focus on technology, geographic reach and the clear similarities in how
we work to serve our customers make Strive the perfect merger candidate.
We are thrilled to join forces with the Strive team and can’t wait to
see what the future holds for Redwood.”
The combined company
will operate under the Redwood brand, and Strive CEO Ben Greene,
President Jon Provus and the rest of Strive’s management team will be
joining the Redwood organization. Similarly, Adam McDaniel, the founder and CEO of LTX is remaining with Redwood.
“Redwood Logistics is the
ideal partner for Strive due to our compatible cultures and shared focus
on addressing our customers’ most critical logistics challenges through
the effective combination of people and technology,” said Greene.
Redwood Logistics driving to double in size
